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GoldToken - Bitcoin Sidechain By CoinShares Digital Asset Manager

GoldToken - Bitcoin Sidechain By CoinShares Digital Asset Manager

October 12, 2021 | 

6423 Views | 

Jesus Guzman | 

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This article details how a consortium of 3 global firms combined their effort to develop a digital asset that enables individuals to access gold easily.

One of the partners, Blockchain, formed a partnership with Ethereum to develop a cryptocurrency that is both backed by gold and is supported by Ethereum digital wallets and the blockchain wallet. The article also shows the value and current price of the GoldToken developed, DGLD.

An insight into the DGLD

The cryptocurrency market keeps growing globally at an increasing rate. Firms keep inventing new ways of making crypto less volatile and secure to attract more investors. Recently, a consortium of firms developed a token, DGLD, that is backed by gold thus making it stable and ensuring that it is not centralized.

This article will enlighten its readers on how DGLD operates, where it is traded, stored, and its current price in the market. The article will also give detailed information on why DGLD stands out amongst other stable coins. Read the article to gain insightful information before investing in DGLD.

What is Digital gold coin (DGLD)

DGLD is a digital asset. It represents the physical gold assets stored in a vault in Switzerland. A consortium of companies including MKS (Swiss) SA, Coinshares, and Blockchain combined their effort to tokenize the physical gold in a sidechain in the bitcoin network.

In other words, DGLD is a GoldToken digital asset that is pegged to the gold value at a ratio of 1 DGLD: 1/10 troy ounce of gold according to Cryptoxtrade leading cryptocurrency news and analyst platform.

About DGLD and how it operates.

The GoldToken digital asset was developed to create convenience for consumers and retailers who are dealing with gold. In the past, individuals, governments, and businesses have stored wealth in gold but have been experiencing trouble acquiring a sizeable amount of gold.

GoldToken addresses this challenge by allowing one to transact and own gold on a 24/7 basis. Each gold placed in the Swiss vault has a specific GoldToken that is created for it. It is in turn sent to the digital wallet of the owner.

What is the point of digitizing gold?

As stated earlier, before the digitisation of gold, it was difficult to access gold in the precious metals market. It was partly due to the presence of numerous mid brokers in the market. The following are some of the benefits that investors and consumers are reaping from the digitization of gold through the launching of GoldToken:

  • The stakeholders can access the gold 24/7 thus they don’t depend on the limited market hours
  • Individuals can gain economically from the gold by reaping a yield once they place their gold as a collateral asset
  • The gold becomes a cost-effective investment since the mid brokers have been cut off from the equation
  • Owners can enlist their gold as a collateral asset
  • Collateral takers can pinpoint the direct owner of the gold, its location, and originality thus reducing the risk associated with collateral assets on their part.

How is DGLD different from other stable coins?

Stable coins are cryptocurrencies that have achieved stability by being linked to a more stable currency or asset at a certain ratio.

For example, USD coins are linked to USD flat coins at a ratio of 1:1. It results in stable coins being leashed to a financial system that centralizes and regulates the flat coin currency or asset they are linked to.

However, unlike other stable coins, DGLD is not leashed to any centralized system and is not compliant with regulations governing local currencies. The amount of DGLD in your digital wallet indicates the amount of physical gold an owner holds in the Swiss vault.

Where to buy, trade, and hold DGLD

According to the Coinshare website, DGLD is exclusively available on Blockchain’s exchange, the PIT. The platform has a wide audience and lending pool which ensures an assurance in the liquidity levels of the exchange platform thus enhancing the trading of DLGD digital assets.

After acquiring the GoldToken, one can hold it in a digital wallet that the DGLD platform offers. The digital wallet is secure since the security features ensure only the owner can access it.

Wrapped DGLD digital asset

Blockchain partnered with Ethereum and launched wrapped DGLD (wDGLD) to make gold more accessible. It is an ERC-20 token. The wDGLD is attractive to investors. It has the appeal of being linked to gold.

In addition, it is flexible due to Etheureum support. One can hold it in any digital wallet that backs the ERC-20 token. According to Blockchain, the wDGLD is linked to gold at a ratio of 1:1 and a unit of wDGLD also represents a unit of DGLD.

DGLD’s price today

As earlier stated, DGLD is pegged to gold at a ratio of 1:1/10 troy gold ounce. The value of the DGLD is attached to the value of the gold. As per the DGLD website on 12th October 2021:

1DGLD= 0.09793986 troy oz

Current price of gold= US$1759.99 per oz

Which makes today’s DGLD price to be

$1759.99/oz * 0.09793986 oz = US$172.37

Furthermore, the fx empire cryptocurrency exchange platform indicates that the price of DGLD as of 12th October 2021` is US$172.02.

Summary

For a long time now, gold has been used to store wealth. Unfortunately, the precious metals market has been flooded with mid brokers who made transactions and accessibility of gold harder.

To solve that, a consortium of global companies, Blockchain, a renowned crypto wallet service provider, CoinShares, and MKS (Switzerland) SA combined their efforts and resources to develop a digital asset (DGLD) that is pegged to gold at a ratio of 1:1/10 troy oz.

Because of this, individuals and retailers can transact with gold easily. The development of the DGLD has cut off the middlemen thus making gold a cost-effective investment and a low-risk collateral asset. Moreover, one can trade in gold at any hour and day since the digital platforms operate on a 24/7 basis.

DGLD is different from the other stable coins in the cryptocurrency market. The other stable coins such as the USD coin are tied to the financial system since they are linked to a stable flat coin compliant with a centralized and regulated system.

The DLGD, on the other hand, is not leashed to a central system. It is pegged to gold which is not centrally managed. On top of that, the gold stored in Switzerland is not liable to Switzerland’s monetary and fiscal regulations.

The DGLD token can be traded on Blockchain’s exchange platform, the PIT, exclusively. After acquiring them, an individual can store them in a digital wallet which offers high security thus reducing the risk of being hacked.

The token is available on few platforms hence Blockchain formed a partnership with Ethereum to develop wDGLD which is an ERC-20 token that can be stored in either the blockchain digital wallet or any other digital wallet that supports Ethereum based cryptocurrencies.

According to the DGLD platform, the current price as of 12th October 2021 is US$172.37 as per the following calculation

1DGLD= 0.09793986 troy oz

Current price of gold= US$1759.99 per oz

Which makes today’s DGLD price to be

$1759.99/oz * 0.09793986 oz = US$172.37

On the other hand, as per the fx empire crypto exchange platform, the current price of DGLD as of a12th October 2021 is US$ 172.02. The token is known to be stable with no significant variations with a linkage to gold thus it will be profitable to invest in DGLD for all prospective investors.

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justine moore  So many people told me there was no profile in trading binary. Mr Chris has helped me prove them wrong cause I have made 2500 USD with an investment of 250USD in just 3days of trading with Mr Chris and am so happy that am part if this. Thanks again Mr Chr  1 year ago from Nigeria

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